South Indian Bank Shares Tumble 18% on CEO’s Exit Decision Despite Record Q3 Profit

South Indian Bank’s shares plunged as much as 18%—the steepest single-day fall since its 2006 listing—after the lender announced that Managing Director and CEO P.R. Seshadri will not seek reappointment upon completion of his term on September 30, 2026. The stock recovered slightly but was still down 12.43% intra-day. Seshadri cited personal reasons for his decision, which he conveyed to the board on January 29. However, the bank confirmed he will continue in office until his tenure ends, ensuring leadership continuity during the transition. The board has initiated a search for a successor, including candidate shortlisting and regulatory approvals from the Reserve Bank of India (RBI) and shareholders. The announcement overshadowed what was otherwise a strong financial performance: the bank posted a record Q3 net profit of ₹374.32 crore, up 9% YoY, with NII at ₹881 crore (+1.3%) and non-interest income rising 19% to ₹485.93 crore. For nine months, cumulative profit reached ₹1,047.64 crore. Asset quality improved significantly—GNPA fell to 2.67% from 4.30%, NNPA to 0.45%, and provision coverage rose to 91.57%. Deposits grew 13% YoY to ₹1.15 lakh crore, driven by retail and NRI inflows, while CASA surged nearly 15% and capital adequacy stood healthy at 17.84%. Despite robust fundamentals and sustained growth across corporate, MSME, housing, auto, and gold loans, investor sentiment was rattled by the leadership uncertainty—highlighting Seshadri’s pivotal role in the bank’s turnaround journey.